Huh. Another SV darling of the past 5 years ends up being a massive fraud. Sad there’s no real media in this country to cover these stories.
https://news.ycombinator.com/item?id=18041106
“The grapevine says this place is a dog and pony show.”
https://news.ycombinator.com/item?id=18042433
“Grapevine is true. What they are doing is extremely questionable. They are billing insurance thousands of dollars for tests that are rudimentary and only look at absence or presence of microbes.”
Yes, Theranos was headquartered in SV, but, the vast majority of the investment money came from outside. (The only SV money was some very early stuff from Draper, which was a relatively small amount, and some later money from Larry Ellison.)
Yes, George Schultz lives in SV, but he's not of SV.
DFJ/Threshold did the seed round, $500k, but doesn't seem to have invested afterwards. ATA did B, at $9.1M, and was a minority investor in C, which totaled $28.5M; Ellison was the C lead and there was a third.
In short, maximum for DFJ, ATA, and Ellison from those three rounds is <$40M. (Rupert Murdoch did A, $5.8M.)
Theranos raised a total of $1.4B. $40M, aka <3%, is in the noise, and the fact that it was early not late says that SV wasn't interested.
https://www.crunchbase.com/organization/theranos/company_fin...
For the affirmative: Holmes was a Stanford student; the company was located in Palo Alto; she grew up idolizing Steve Jobs and thought she was emulating his approach; early investors were Tim Draper (personally or via DFJ? It’s not clear to me), Ellison and ATA.
For the negative: Draper’s investment was a super-early, “family and friends” investment when the company was just a “promising idea”, kinda like a YC investment, and he didn’t invest again; Ellison isn’t a VC and was also just excited by the concept and the founder; other than Draper, none of the main SV VCs invested - i.e., Sequoia, KP, Bessemer, Graylock, Benchmark, Accel, General Catalyst, Index, etc, or even any smaller ones with any pedigree (ATA was a new firm in 2004 and is now defunct, and never had any repute); most of the funding, even quite early, and especially later, came from sources outside SV, eg Murdoch, politics figures, and other non-SV investment firms - you just wouldn’t raise funds from those kinds of sources if you were making it as a conventional Silicon Valley startup.
Most of the big names connected with Theranos are former/future cabinet secretaries.
I can’t think of any other time anyone talked about “Henry Kissinger” and “Silicon Valley” in the same sentence.
He is also not alive.
Not sure it necessarily applies in this case though.